Civil action in lieu of prerogative writs.
This is an action in lieu of prerogative writs wherein plaintiff Sherman Holding Realty Corp. challenges the validity of a special assessment levied by defendant William J. McGann, tax assessor, and the City of Elizabeth.
Plaintiff is the owner of property having a 200-foot frontage on Sherman Avenue in Elizabeth. Prior to July 1961 the city contracted for the improvement of Sherman Avenue, the total contract price being $27,540.97. On or about May 8, 1962, pursuant to notice, the Elizabeth City Council confirmed an assessment of $3,093.80 made against plaintiff's property. The assessment was made on a front-foot basis. The total front footage on Sherman Avenue was 1,780.40 lineal feet, which included 924.81 feet fronting Wilson Park, a public park owned by the city. This figure was divided into $27,540.97, thus arriving at a front foot assessment of $15.469. Plaintiff having a 200-foot frontage, was assessed $3,093.80. The city also assessed five other property owners fronting Sherman Avenue, as well as itself, in the sum of $14,699.59 for the park frontage.
After assessing these properties, the city, pursuant to R.S. 27:15-1 et seq. , received State Aid in the sum of $19,120.30 to help defray the cost of this improvement and another. Out of this fund $12,342.65 was applied by the city to reduce the assessments levied against the park property on Sherman Avenue. The remaining $6,777.65 has been used to improve Merritt Avenue, from Delaware Street to Erie Street.
It is plaintiff's contention that the assessment upon its property should not have been made at all, or, in the alternative, if the assessment was proper, it should have been reduced by the State Aid; that plaintiff should be given a reduction in the assessment equal to the "per feet" ratio of its property
to the State Aid received. Defendants contend that R.S. 27:15-1 et seq. does not provide that a property owner should in any way benefit by the State Aid.
R.S. 27:15-1 to 20 provides for State Aid to municipalities "for the construction, reconstruction, grading, drainage, maintenance, lighting or repair of municipal roads, or any other purpose permitted by this chapter." N.J.S.A. 27:15-1(C). The act contemplates specification of what projects are to be undertaken and approval of such projects by the State Highway Commissioner before they are begun. N.J.S.A. 27:15-1.7. It follows from this that the municipality cannot disburse the State Aid to any project considered necessary, or to a general road fund. Furthermore, under N.J.S.A. 27:15-1.8, if disbursement is made to a municipality in any year and the funds are not expended for the purposes set out by the act, or no obligations have been incurred by the municipality against such Aid, then the State Highway Commissioner shall deduct an amount equal to the unexpended sum, or the sum not required to meet obligations contemplated by the act, from the amount allocated to that municipality for the year following the disbursement. The deduction is reserved to the credit of the municipality for a period of three years. If it remains unused at the expiration of such three-year period, the credit lapses and becomes part of the motor vehicle revenues in the General State Fund. N.J.S.A. 27:15-1.12. Nowhere in the act is there specific reference to what effect such State Aid shall have upon assessments made upon property owners abutting the municipal road to be improved.
The first question to be determined is: What figure should be used in determining the reduction to adjacent property owners, assuming they are entitled to a credit because of the State Aid? Plaintiff contends the full amount donated ($19,120.30) should go toward reducing the assessments of
the property owners. Defendant, on the other hand, contends that the sum of $6,777.65 was properly applied to the improvement on Merritt Street; that plaintiff in no instance should benefit from this sum, and that if the court should hold for plaintiff, it should only be for a proportionate ...